Transcript product/service management

3.01
PRODUCT/SERVICE
MANAGEMENT
MODIFYING PRODUCTS
Modifying the product allows a company
an opportunity to increase sales without
the risk of introducing an entirely new
product. Also, such modifications could
include any technological advances that
have taken place since the product's
introduction.
MODIFYING PRODUCTS
• The product should remain on the
market; its sales have leveled off—not
stopped. If the company does nothing,
sales may continue to decline.
• Tripling the advertising budget DOES NOT
guarantee increased sales, especially if
there is something unsatisfactory about
the existing product.
QUALITY LEVEL
• The quality level of a product is an
important part of product/service
management because it reflects the
image of the business.
• Product managers must choose not only
the image they wish to portray but the
level of quality that is appropriate to the
products themselves.
QUALITY LEVEL
• NOT RELATED TO LEVEL OF QUALITY
• The way that a product works refers to its
design (not quality level).
• By offering warranties, product managers
are protecting consumers. Labels identify
a product's brand.
ELIMINATING SLOW
SELLERS
The product/service management function
follows a product throughout its life cycle,
determining when to eliminate slowselling items.
ELIMINATING SLOW SELLERS
NOT part of the product/service management
function :
Determining where products will be offered for sale is a
channel management activity.
Focusing promotional activities on new-product releases
would be carried out in promotion.
Setting discounts to clear
products from inventory is an aspect of pricing.
PRODUCT LIFE CYCLE
• Established products are in the maturity stage,
and one way marketers can extend their life
cycles is by finding new ways that the
products can be used by current consumers.
• Continuing to promote the same product to
current users will not extend its life cycle.
PRODUCT LIFE CYCLE
• Consumers who are innovators are attracted to products
in the introductory stage, not the maturity stage.
Restricting distribution would shorten rather than
lengthen the product's life cycle.
ADAPTING MARKETING
STRATEGIES
• To adapt its marketing strategies.
Businesses change their marketing
strategies as their products go through the
stages of the life cycle.
• This means that companies need to know
where products are in their life cycles in
order to use marketing strategies
appropriate for each stage
ADAPTING MARKETING
STRATEGIES
• It is NOT usually possible to prevent
imitators from entering the market or to
predict the length of a product's life cycle.
• Finding new uses for the product is a
marketing strategy that is used to
boost sales for a mature product.
ADAPTING MARKETING
STRATEGIES
By the time a product reaches the
growth stage, there are usually many
competitors in the market. This forces
producers to lower prices in order to
compete for market share. The lower prices
can cause profits to decline.
ADAPTING MARKETING
STRATEGIES
• Sales are on the increase in the growth
stage. More efficient production helps to
support profits. Adjusting marketing
strategies should stabilize profits, not
cause them to decline.
MASS CUSTOMIZATION
• Computerization and the technology of
mass production have created the method
of mass customization which allows
businesses to produce customized
products for one customer or only a
very few customers.
MASS CUSTOMIZATION
• Businesses that use a mass-customization
method can produce large quantities of
one product in many different varieties.
• This method allows businesses to meet
the individual needs of many customers by
making variations of one product.
MASS CUSTOMIZATION
• Automatic production, computerized
robotics, and intermittent conversion are
not methods that allow businesses to
produce products that are specialized
for a very few customers.
TRACKING VISITORS TO
WEBSITES
• As a result of computer technology, many
businesses have developed web sites that are
accessible to customers. The technology that
allows businesses to have web sites also makes
it possible for those businesses to track the
visitors to their web sites and obtain
information about them such as name,
address, type of purchase, amount of sale,
etc.
TRACKING VISITORS TO
WEBSITES
• Businesses often use this information
to improve their product/service mix.
For example, if a business determines that
customers are not buying a certain
product, they might improve the product or
replace it.
TRACKING VISITORS TO
WEBSITES
• Businesses do not use computer
technology to mail questionnaires to
customers.
• Businesses often compile the information
they obtain through their web sites in
databases. However, the information is
not useful until the businesses analyze
it.
INTRANET
• Intranet refers to a business's network of
computers that are linked so that the
employees can retrieve the same
business information. For example, a
software program that tracks inventory
may be available for the sales department,
the shipping department, and the
purchasing department to review.
INTRANET
• A business that uses an Intranet system to
manage products maximizes its
communications and response time.
ETHICS
• One of the ethical issues that
product/service managers face is that of
being environmentally friendly.
• Many businesses have altered their
packaging after being pressured to do
so by consumers.
ETHICS
• Ethics are principles that govern behavior
and Do Not involve the use of color on
the label or using the packaging for
promotion.
• Including nutrition information is NOT an
ethical decision because it is required by
law.
UNETHICAL BEHAVIOR
• The Simpson Company embellishes the
information that it places on its product
labels. When a company embellishes
information on product labels, it is
exaggerating the attributes or performance
of the product. This is unethical behavior
because the company is misleading
customers.
ETHICS
• If the company misleads its customers, the
customers may use the product
inappropriately, which may harm them or
others.
• Using recyclable materials for product
packaging and discontinuing the
production of a slow-moving item are
ethical actions.
REVIEW
• 1. (2) Five years after a new product has been
introduced, sales begin to level off because
customers are purchasing the competitor's
brand. What strategy would be most appropriate
to use in this situation?
A. Take the product off the market
B. Do nothing; fluctuations in sales are common
C. Modify the product to renew customer interest
D. Triple the advertising budget for the product
• 1. (2) Five years after a new product has been
introduced, sales begin to level off because
customers are purchasing the competitor's brand.
What strategy would be most appropriate to use in
this situation?
A. Take the product off the market
B. Do nothing; fluctuations in sales are common
C. Modify the product to renew customer
interest
D. Triple the advertising budget for the product
• 2. (2) Why is the quality level of a product
an important product/service
management decision?
A. It identifies a product’s brand
B. It reflects the image of the business
C. It protects consumers
D. It refers to the way the product works
• 2. (2) Why is the quality level of a product
an important product/service
management decision?
A. It identifies a product’s brand
B. It reflects the image of the business
C. It protects consumers
D. It refers to the way the product works
• 3 (2). Which activity is addressed in the
product/service management function?
A. Setting discounts to clear products from inventory.
B. Determining where products will be offered for sale.
C. Focusing promotional activities on a new-product
release.
D. Eliminating products that are slow sellers
• 3 (2). Which activity is addressed in the
product/service management function?
A. Setting discounts to clear products from inventory.
B. Determining where products will be offered for sale.
C. Focusing promotional activities on a new-product
release.
D. Eliminating products that are slow sellers
• 4 (2) Which of the following is a way that a
business can extend the life cycle of an
established product?
A.
B.
C.
D.
By promoting the product to current users.
By finding new uses for the product.
By restricting distribution.
By attracting customers who are innovators.
• 4 (2) Which of the following is a way that a
business can extend the life cycle of an
established product?
A.
B.
C.
D.
By promoting the product to current users.
By finding new uses for the product.
By restricting distribution.
By attracting customers who are innovators.
• 5 (2) Why does a company need to know
what stage of the product life cycle its
products are in?
A.
B.
C.
D.
To prevent imitators from entering the market
To find new uses for the product
To predict the length of the life cycle
To adapt its marketing strategies
• 5 (2) Why does a company need to know
what stage of the product life cycle its
products are in?
A.
B.
C.
D.
To prevent imitators from entering the market
To find new uses for the product
To predict the length of the life cycle
To adapt its marketing strategies
• 6 (2) Why might profits sometimes decline
for the company that first introduced the
product during the growth stage of the
product’s life cycle?
A.
B.
C.
D.
Because sales decline in the growth stage
Because marketing strategies are adjusted
Because competitors have entered the market
Because product is more efficient
• 6 (2) Why might profits sometimes decline
for the company that first introduced the
product during the growth stage of the
product’s life cycle?
A.
B.
C.
D.
Because sales decline in the growth stage
Because marketing strategies are adjusted
Because competitors have entered the market
Because product is more efficient
• 7 (2) What is a technologically advanced
method that allows businesses to produce
products that are specialized for a very few
customers?
A.
B.
C.
D.
Intermittent conversion
Automatic production
Computerized robotics
Mass customization
• 7 (2) What is a technologically advanced
method that allows businesses to produce
products that are specialized for a very few
customers?
A.
B.
C.
D.
Intermittent conversion
Automatic production
Computerized robotics
Mass customization
• 8 (2) What is one way businesses use
computer technology to obtain information to
improve their product/service mix?
A.
B.
C.
D.
Mailing questionnaires to customers
Tracking visitors to their web sites
Compiling detailed databases
Preparing interactive software products
• 8 (2) What is one way businesses use
computer technology to obtain information to
improve their product/service mix?
A.
B.
C.
D.
Mailing questionnaires to customers
Tracking visitors to their web sites
Compiling detailed databases
Preparing interactive software products
• 9 (2) Which of the following technological
tools helps a business’s employees
simultaneously access the same information
about the business’s products?
A.
B.
C.
D.
Memory card
Micro-portal
Intranet
Generator
• 9 (2) Which of the following technological
tools helps a business’s employees
simultaneously access the same information
about the business’s products?
A.
B.
C.
D.
Memory card
Micro-portal
Intranet
Generator
• 10 (2) What is an example of an ethical
issue that a product/service manager might
face?
A.
B.
C.
D.
Use of color on the label
Use of environmentally friendly packaging
Use of packaging as a means of promotion
Use of nutrition information on a food label
• 10 (2) What is an example of an ethical
issue that a product/service manager might
face?
A.
B.
C.
D.
Use of color on the label
Use of environmentally friendly packaging
Use of packaging as a means of promotion
Use of nutrition information on a food label
• 11 (2) Which of the following is an unethical
situation in product/service management?
A. Vincent Electronics discontinues production of a
slow-moving solar calculator
B. Travis Manufacturing uses recycled materials for its
product packaging
C. Donna’s Dress Boutique obtains deep discounts
from a new clothing designer
D. The Simpson Co. embellishes the info. it
places on its product labels
• 11 (2) Which of the following is an unethical
situation in product/service management?
A. Vincent Electronics discontinues production of a
slow-moving solar calculator
B. Travis Manufacturing uses recycled materials for its
product packaging
C. Donna’s Dress Boutique obtains deep discounts
from a new clothing designer
D. The Simpson Co. embellishes the info. it
places on its product labels